10,000 Friends of Pennsylvania Pennsylvania Bar Association Constitutional Review Commission Public Hearing Jack Machek March 25, 2011

10,000 Friends of Pennsylvania Who we are: An alliance of organizations and individuals from across the state Committed to land use, governance, and infrastructure policies and actions to strengthen all of our diverse urban, suburban and rural communities

10,000 Friends of Pennsylvania Our mission: REVITALIZE cities, boroughs, & suburbs PRESERVE farmland, open space, & rural resource lands CONSERVE natural, heritage, & fiscal resources IMPROVE quality of life for all Pennsylvanians

10,000 Friends of Pennsylvania Past research projects and reports Costs of Sprawl in Pennsylvania –Study of the problems associated with low-density development Planning Beyond Boundaries –Manual on multi-municipal planning Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania –10,000 Friends partnered with the Brookings Institution in preparing and publicizing this seminal report Sewage Facilities and Land Development –Analyzes the relationship between sewage infrastructure and land use in southeastern Pennsylvania

10,000 Friends of Pennsylvania Recent research reports Water and Growth: Toward A Stronger Connection Between Water Supply and Land Use in Southeastern Pennsylvania –Study of the relationship between water supply infrastructure and land use Survey and Evaluation of Multi-municipal Planning –Inventories multi-municipal planning projects in Pennsylvania and assesses the resulting plans and their implementation

10,000 Friends of Pennsylvania Why do we do this work? ● Pennsylvania ranks low on demographic and economic performance and high on sprawl and abandonment ● These patterns undermine the state’s municipalities and competitiveness, and are fiscally wasteful ● These patterns are not inevitable; state and local policies facilitate sprawl and promote abandonment ● Pennsylvania can build a better future for its residents In 2003, “Back to Prosperity,” a report about the state of Pennsylvania by the Brookings Institution concluded:

10,000 Friends of Pennsylvania More recent research confirms troubling trends have continued: Continues to exhibit weak growth: –Ranks 46 th in population growth –Some job growth, but many new jobs are low pay, low quality Continues to spread out, while older communities hollow out A follow-up report by Brookings shows that since 2000 Pennsylvania:

10,000 Friends of Pennsylvania Poor Financial Health of Municipalities: Due to Funding Structure, and Growth and Development Patterns

10,000 Friends of Pennsylvania 4 Critical Facts Impacting Municipal Fiscal Health: Number of acres developed from rural to non-rural land use in Pennsylvania, : 2,857,800 Net Housing Units Change, : +1,550,663 Net New Households, (Population gain/persons per household): 245,924 Number of Municipalities in Pennsylvania: 2,509

10,000 Friends of Pennsylvania A growing problem of municipal fiscal distress threatens future growth More than 1,300 municipalities are in worse fiscal condition than they were 30 years ago More than half the population lives in communities suffering some level of fiscal stress All types of municipalities, all regions of the state are affected A seminal report by the Pennsylvania Economy League shows that:

10,000 Friends of Pennsylvania Five Stages of Municipal Decline: Developed by the Pennsylvania Economy League 1.Low taxes with prosperity 2.Gradually increasing tax rates due to increasing demand and need for services 3.Expansion plateaus; Taxes increase, with reductions in non-core services 4.Tax Base and/or tax revenues begin to decrease, with reductions in even core services 5.Loss of tax base, population, and ever-worsening fiscal distress

10,000 Friends of Pennsylvania Over time, all Pennsylvania municipalities are experiencing: Either: –Decreasing tax base, population, and tax revenue– leading to fiscal stress –1. Increasing population, tax base, and development, with increasing tax revenue– leading to an ever- escalating need and demand for services; 2. the demand for and costs of services increases faster than the revenue increases; 3. budget deficits, fiscal stress, and decline Today’s winners are tomorrow’s losers, and vice- versa

10,000 Friends of Pennsylvania Pattern is Duplicative, Wasteful, and Unsustainable: Municipalities are pitted against each other in a futile attempt to ensure long term fiscal solvency Leads to a rising tide of fiscal stress and distress Fiscal problems make it difficult for local governments to provide the high quality services and infrastructure needed to attract future growth No municipality is immune, and all will be effected Urgent Need for a Philosophy and Policies to Counter these Unsustainable Trends

10,000 Friends of Pennsylvania What Do We Do About Municipal Fiscal Stress? Four main priorities: Help communities work together across boundaries to “right-size” service provision Reform the local taxation structure and options for municipalities and counties Enact structural reforms to promote fiscal health of municipalities Target public investments according to a prudent plan of land consumption discipline

10,000 Friends of Pennsylvania Help communities work together across boundaries Encourage and incentivize inter-governmental cooperation Make intergovernmental collaboration on service delivery easier Create shared service delivery systems Empower counties to deliver basic services

10,000 Friends of Pennsylvania Specific Recommendations Amend Intergovernmental Cooperation Law to create procedures for resolving code conflicts that hamper efforts to enter cooperative agreements or share services Amend the County Code to provide clear legal authority for Counties to deliver traditional municipal services, in partnership with municipalities Amend Act 47 to provide distressed municipalities with more tools to regain fiscal stability, and provide means to deal with municipalities that have become non-viable Enact a Regional Police Services Act to provide a consistent approach to creating regional police departments, with a source of funding to address start-up costs

10,000 Friends of Pennsylvania Reform local taxation Let communities decide how and how much to tax Modernize and enhance local tax and revenue options Give communities (and counties) a wide menu of revenue- generating tools to avoid future fiscal distress Allow and encourage tax and revenue sharing across boundaries

10,000 Friends of Pennsylvania Enact Structural Reforms to Promote Fiscal Health Concept of a “Local Impact Fee” is gaining traction in dealing with public costs of Marcellus Shale drilling Create a “Local Impact Fee” to compensate municipalities and counties in proportion to the amount of their non-taxable real estate Create a “Local Impact Fee” to compensate municipalities for the cost of services to non-resident commuters Create an escrowed fund with a dedicated funding source to deal with legacy costs, start-up costs, and legal costs that are barriers to intergovernmental cooperation Help municipalities deal with and reduce health care and pension liability costs

10,000 Friends of Pennsylvania Why Target Public Investments to Reduce Land Consumption? Land is a finite natural resource Fiscal prudence and fiscal discipline demand that we conserve land to reduce costs We must account for and factor in true real estate development costs, and the future consequences thereof, into local decision-making process Continued excessive land consumption will erode both Pennsylvania’s rural and urban quality of life, just when these assets matter more in the marketplace

10,000 Friends of Pennsylvania Target public investments Target infrastructure investments toward existing systems, with maintenance of existing assets prioritized Adopt philosophy of “Fix it First” Link and Prioritize transportation, water, and sewer infrastructure investments that support existing communities, conserve land, and reduce land consumption Create a “Local Impact Fee” to pay for municipal public safety costs fairly, promote regional policing, or reimburse the State Police for providing free local police patrolling

10,000 Friends of Pennsylvania It’s not just “their” side of the boat that’s sinking! Pennsylvania is a “Commonwealth” in the true sense of the word…